All these new gadgets are designed to make our lives easier, but the constant innovations can make them intimidating for consumers to buy, not to mention more difficult for retailers to sell. And companies like Circuit City must not only worry about how to get knowledgeable people in front of customers, they also have to do so in the shorter and shorter time windows between product release and technology obsolescence.
“We noticed the trend toward more complex products in the late ’90s, as digital technologies really started to gain traction,” said Jeffrey S. Wells, senior vice president of human resources at Circuit City. “Our product specialists were facing greater and greater challenges in providing customers with valuable service around these new products, and our instructor-led training solution simply couldn’t keep up. That’s when we knew that we had to shift our training strategy.”
In 2000, Circuit City began a partnership with DigitalThink, a San Francisco-based custom e-learning provider, to change its training model to meet the demands of the consumer electronics market. The first initiative involved 50 hours of new associate training, including basic product knowledge, customer service skills and company information and policies.
“The move to e-learning was strategic from the beginning,” said Wells. “Our executive team knew that a successful e-learning program was critical to our ability to win loyal customers and ultimately drive sales.”
The typical sales associate at Circuit City is computer-savvy and somewhere between 18 and 30 years old. Given the training audience, the e-learning was designed specifically for Circuit City to be fun, short and interactive—more appealing than a three-day training class with an instructor.
“It was essential to us that that our product specialists found the training not only engaging, but worthwhile,” said Wells. “From the outset, we established guiding principles that the training must be learner-centered and focused on real-world skills our employees could take directly to the store floor.”
Technology was also a critical success factor. In Circuit City’s case, the PeopleSoft HR management system was integrated with DigitalThink’s Web-based e-learning platform. At the initial launch in September 2000, 42,000 associates were registered in just a few hours. “We were all crossing our fingers,” said Wells, “and there were zero errors.” Since then, Circuit City has automatically enrolled more than 100,000 learners in more than 3 million courses. New employees have job-appropriate training waiting for them within two hours of being hired.
Circuit City corporate executives, starting with the chief executive officer, were among the first to take the e-learning curriculum. “It was important to show how committed the executive team was to e-learning,” said Wells. “When you make such a strategic change, it’s important to make it very clear that the executives are not only behind it, but immersed in it.”
With e-learning, Circuit City was able to cut training department costs significantly, as fewer trainers were needed in the field. The average associate time in training was reduced from 200 hours to 68. The savings directly correlate to costly, unproductive time away from the sales floor. Within six months of the launch, Circuit City had achieved a positive ROI on its e-learning investment.
And e-learning also offered increased opportunity to employees. Circuit City has followed an open-learning-environment model, which gives motivated employees the ability to further their careers. For instance, one Circuit City employee working in the warehouse stocking shelves noticed that his friends were having more fun—and earning more money—working on the sales floor. The key to their success, he noticed, was completing their training. He took it upon himself to take all the sales and product e-learning on the system. Within a few months of convincing his store manager that he was well trained enough to deserve a chance on the store floor, he was the store’s top salesperson.
Circuit City soon discovered that new-hire training was only a piece of the puzzle for making employees capable.
“The experienced product specialists wanted more in-depth information on the latest products hitting the sales floor,” said John McKeever, director of training for Circuit City. “After seeing how quickly we could create and update content on our e-learning platform, we felt rapid updates on new product information should be the next area of focus for us.”
In the summer of 2002, Circuit City launched a certification program for all store employees, tenured and new-hire alike. Circuit City product specialists are now certified in their key product areas within 60 days of hire—all via e-learning. Circuit City considers certifications to be a strategic benefit—having the most knowledgeable employees in the industry.
Store managers also benefit from e-learning. Prospective managers complete e-learning requirements before attending the in-person training at headquarters. Expensive training travel is therefore focused only on qualified candidates, and instructor-led management training has been reduced by 60 percent.
“The management training area has been a real success for us,” said McKeever. “We can prequalify trainees for the instructor-led training and focus that phase on material that needs to be face-to-face.”
Circuit City is now rolling out e-learning to other corporate departments, such as the product service organization. The latest release in product service is a course on soldering skills. Well-trained employees are critical to this business function—a properly fixed big-screen television can make or break a customer’s satisfaction and loyalty.
“Overall, we’ve been extremely pleased with the business results of our e-learning initiative,” said Wells. “We’ve been able to positively affect customer satisfaction and employee productivity while decreasing our training costs significantly.”
The benefits haven’t just been internal to Circuit City. Manufacturers also saw the benefits of the e-learning system. The advantage of having Circuit City product specialists who are knowledgeable about specific manufacturers’ products is clear—employees can present full technology solutions to customers, providing a better shopping experience. In fact, many consumer electronics suppliers now partner with Circuit City to create e-learning on key products.
Earlier this year, e-learning also enabled Circuit City to make one of the largest strategic moves in its history—a change from commissioned product specialists to hourly product specialists. Circuit City realized that commissioned sales associates and hourly sales associates who were trained to the same level performed on par with one another.
“Through our reporting system, we were able to verify that hourly associates and commissioned associates were just as productive, as long as they’d completed their e-learning certifications,” said McKeever.
So the company decided to change its cost structure. In early February, Circuit City shifted the entire sales force to an hourly model, resulting in projected annual savings of $130 million.
E-learning was key to the change. W. Alan McCullough, chairman, president and chief executive of Circuit City, stated, “Our experience has proven that, with the comprehensive training now available through our state-of-the-art online training system, hourly associates can deliver the high level of product knowledge that Circuit City customers expect while also taking on a broader range of customer service responsibilities.”
With the ability of e-learning to drive such strategic initiatives, it’s not surprising that retailers in general are showing interest. The retail industry, with its geographically distributed workforce, high numbers of employees and significant turnover, is ideal for a solution that can consistently train lots of people inexpensively. E-learning fits this bill nicely. “We’re seeing significant interest from companies across the retail spectrum,” said Jeff Marshall, director of retail solutions at DigitalThink. “Most retailers, big box to small footprint, hard goods to soft goods to food service, understand the value of a system that can quickly make their employees able to serve customers well.”
And critical training can extend beyond the customer service and product knowledge that Circuit City focuses on. “We’ve seen significant interest from retailers in the area of compliance training as well. With a large, distributed workforce, it’s difficult to train everyone on issues like safety of the physical workspace, harassment and discrimination,” said Marshall. “E-learning allows retailers to make sure their establishments are safe for employees and customers. Plus, with a system that tracks exactly who is trained when, retailers can limit their liability in instances where an employee fails to act according to the training.”
As an early retail adopter of e-learning, Circuit City feels that it is ahead of the game. “We continue to push the envelope on what we can do with this training medium,” said Wells. “This initiative has changed our culture to be learning-focused. We are a different company with e-learning.”
Todd Clyde is vice president, products, for Digital Think. E-mail Todd at firstname.lastname@example.org.
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